D vs NEE: Dividend Yield, Growth & Safety Comparison
Dominion Energy, Inc (D) and Nextera Energy Inc (NEE) are both in the Utilities sector, making them natural rivals for dividend investors. D offers a significantly higher 4.19% yield compared to NEE's 2.49%, a gap of 1.69%. For dividend growth, NEE leads with a 5-year CAGR of 10.2% versus D's 1.5%. NEE holds the edge in dividend safety with a "Moderate" rating. NEE is a Dividend Aristocrat with 30 years of consecutive increases.
Key Metrics Comparison
| Metric | D | NEE |
|---|
| Dividend Yield | 4.19% | 2.49% |
| Annual Dividend | $2.67 | $2.27 |
| 5-Year CAGR | 1.5% | 10.2% |
| Payout Ratio | 87% | 69% |
| Consecutive Years | 0 | 30 |
| Price | $66.31 | $93.81 |
Yield Comparison
Dominion Energy, Inc (D) currently yields 4.19%, which is attractive for the broader market. That's 1.69% more than Nextera Energy Inc (NEE), which yields 2.49%. In dollar terms, D pays $2.67/share annually versus NEE's $2.27/share.
Dividend Growth
Over the past five years, NEE has grown its dividend at a 10.2% CAGR compared to D's 1.5%. D: Dividend growth is slowing — the 3-year CAGR of 0.0% trails the 5-year rate of 1.5% and the 10-year rate of -0.5%. NEE: Dividend growth has been steady, with a 3-year CAGR of 10.1% and a 5-year CAGR of 10.2% (10-year: 11.2%).
Dividend Safety
D's dividend safety is rated "At Risk." The payout ratio of 87% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x. NEE's dividend safety is rated "Moderate." The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. NEE's payout ratio of 69% is more conservative than D's 87%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in D generates approximately $419/year in dividend income, compared to $249/year from NEE — a difference of $170/year. At $100,000, that gap widens to $1700/year.
Verdict
- Best for income: D
- Best for growth: NEE
- Best for safety: NEE
Frequently Asked Questions
Which has a higher dividend yield, D or NEE?
Dominion Energy, Inc (D) has a higher dividend yield of 4.19% compared to Nextera Energy Inc (NEE) at 2.49%.
Is D or NEE a better dividend growth stock?
Nextera Energy Inc has the stronger dividend growth with a 5-year CAGR of 10.2%, compared to Dominion Energy, Inc's 1.5%.
Which is safer for dividend income, D or NEE?
Dominion Energy, Inc's dividend safety is rated "At Risk" while Nextera Energy Inc is rated "Moderate." The payout ratio of 87% is elevated, which may indicate the dividend could be cut if earnings decline. Earnings cover the dividend 1.1x. The payout ratio of 69% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
How much income does $10,000 in D vs NEE generate?
A $10,000 investment in D generates approximately $419/year in dividends, while the same amount in NEE generates about $249/year.
Is D or NEE a Dividend Aristocrat?
Nextera Energy Inc is a Dividend Aristocrat with 30 consecutive years of increases. Dominion Energy, Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, D or NEE?
Nextera Energy Inc has a lower payout ratio of 69% compared to Dominion Energy, Inc's 87%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
D vs NEE: which is better for retirement income?
It depends on your priorities. D for current income, NEE for dividend growth, NEE for safety. Many retirement investors hold both for diversification.
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